So, how’re we feeling here in built environment land after the federal budget on Tuesday? A bit battered and bruised, and maybe that, once again, this sector with the biggest, cheapest possible contributions to the net zero transition has yet again been mostly sidelined.
There was a huge swivel of the arc lamp towards renewables under a clever jobs and growth agenda, which is clearly welcome – and about time.
John Connor of the Carbon Markets Institute picked up a line item of funding for the nature repair market – another big positive for those who can see that nature and the net zero agenda go hand in glove.
- You can see our list of (selective, highly unscientific) – grabs from a cross section of groups in the ESG space here.
But commercial buildings? Nothing we could see. Housing energy efficiency retrofits? Nada, beyond the starter kits already on the table.
The absence of attention from the feds on housing in the budget was acutely felt and bitterly observed by the social and housing services providers in television commentary on the night and later in media releases.
They noted the obvious: that more help to sustainably retrofit homes would yield enormous benefits over the long term to the people who otherwise suffer heating and cooling stress. Not to mention the stemming the costs of physical and mental health issues that currently burden the budget.
And of course many people have noted that the $300 energy bill rebates – a total of $3.5 billion nationally – could do a lot to solve energy stress permanently if diverted to solar and other housing based solutions.
Dr Gabrielle Kuiper for instance said just ahead of the budget – that authorities underestimate the potential of distributed energy resources or DER.
In a paper for the Institute for Energy Economics and Financial Analysis (IEEFA), she points to the draft 2024 Integrated System Plan (ISP) from the Australian Energy Market Operator (AEMO), which recognises that “DER assets such as rooftop solar and vehicle-to-grid (V2G) charging will likely be the largest component of generation capacity, storage and flexible load in the National Electricity Market (NEM) by 2050”.
But AEMO is being conservative, she says, pointing to IEEFA’s new research Integrated System Plan needs greater ambition on DER to be a true whole-of-system plan, authored by Kuiper and Johanna Bowyer, a lead analyst for Australian Electricity.
“The small stuff adds up. The electricity system is being flipped on its head, with what happens behind the meter becoming crucial to the costs of the system for all consumers into the future,” Kuiper says.
Flexible demand can achieve great outcomes. We already know of Craig Roussac’s work on how load shifting on commercial buildings can yield huge energy savings, most recently broadcast through mainstream media in collaboration with the Australia Institute,
But it’s the same in the resi sector too, it turns out.
IEEFA wants to see more detailed exploration of the possibilities because the advantages are so compelling. They include:
· DER assets are fast to roll- out as, in most cases, land acquisition and planning permission is not required (imagine the saving of angst by green groups who want to rightly protect the environment)
· Network upgrades are not generally required – no big roll out of new poles and wires
· A large workforce is already in place, with more than 10,000 people currently engaged in the rooftop solar and storage industries
· In general, there are no social licence issues – indeed, electrification provides significant health benefits by removing fossil gas pollution from homes and workplaces
· DER assets are largely paid for by households and businesses
These to us are killer arguments. By this we mean they stop most of the objections and barriers to the deployment of new renewables projects stone dead.
This is the report the feds obviously didn’t read before the budget.
Instead the big glamourous end of renewable energy gets most of the joy. This is absolutely valid as the long term solution to our climate problems, including providing for the massive spike in energy consumption expected from artificial intelligence and our ever bigger presence in “the cloud”.
The renewables funding is part of the new Future Made In Australia plan (FMA) that more experts now strongly support – after its initial canning by outfits such as The AFR, whose arguments about the inherent value of no tariffs and free trade have been overtaken by the reality that the world has changed.
FMA is our own mini-me Inflation Reduction Act that responds to the US’s big global capital attractor to build its energy and sustainability transition.
It also responds to the shaky geo–political outlook; we know what happens to supply chains when phenomena like COVID take root, let alone what happens if things escalate in the Middle East, Ukraine, or China’s ambitions.
However, as the building and urban sector knows, creating savings in energy consumption upfront can slash the job renewables need to do by a huge factor.
Maybe the feds have drunk the Kool-Aid; that this sector is ahead of the game and doing just fine on its own.
But we know the Kool-Aid lies. Or at least is deceptive.
It’s a well-worn trope that commercial property is ahead of the curve in terms of energy efficiency, green buildings and so on.
And we know the big corporates are on board with their ESG goals and they’re shunning leasing deals if the property owner doesn’t have a net zero transition plan. Well-placed commercial leasing agents are confirming this on a weekly basis now.
But take a peek down the pyramid of property power to the sub prime markets (for want of a better word) and you see neglect and reliance on lazy capital gains for long term profit – not the hard work of transition.
We’ve still got a lot of work to do and a good place to start is to put much more pressure on the federal government to take a longer term view.
This government has sustained a lot of damage to its green credentials by caving in to the West Australian fossil fuel and mining lobby with its gas plan and its backward step on nature.
If there’s an election before the end of the year or by early next year it will be its last chance to put things right.